South Africa is preparing a new regulatory framework that will tighten oversight of payment intermediaries supporting cross-border online shopping platforms such as Temu and Shein, marking another step in the country’s broader effort to strengthen regulation of international e-commerce.
The South African Reserve Bank (SARB) confirmed the plans in its latest National Payment System Regulatory and Oversight Report, which outlines proposals to regulate Payment Intermediary Foreign Exchange Operators (PIFOs). These businesses facilitate payments between South African consumers and overseas merchants without acting as licensed domestic acquiring banks.
New Rules Target Cross-Border Payment Models
According to the SARB, payment intermediary models have become increasingly common as more South Africans purchase goods from international online marketplaces.
Platforms including Temu, Shein and international Amazon marketplaces rely on payment facilitators that process transactions on behalf of offshore merchants while operating under sponsorship agreements with authorised South African acquiring institutions.
The Reserve Bank said these payment models improve efficiency, enhance competition and simplify international online shopping. However, regulators believe the rapid growth of the sector requires a clearer regulatory framework to strengthen oversight of cross-border payment flows and foreign exchange compliance.
To address these developments, the Financial Surveillance Department has prepared a draft Cross-border Retail E-commerce Framework, while the SARB’s National Payment System Department is revising its issuing and acquiring directives to incorporate PIFO business models.
Both regulatory documents are expected to be released for public consultation during the third quarter of 2026.
Broader Crackdown On Cross-Border Online Retail
The proposed payment rules form part of a wider government strategy to regulate rapidly expanding cross-border e-commerce.
Temu entered the South African market in early 2024, joining Shein, which had already established a strong customer base through low-priced fashion and lifestyle products.
Their competitive pricing was partly supported by South Africa’s previous low-value import concession, which allowed qualifying imports valued below R500 to benefit from simplified customs procedures.
Following concerns raised by domestic retailers over tax fairness, the South African Revenue Service revised its import tax rules in 2024 to close the loophole and align duty collection more closely with existing tariff structures.
Separately, the Department of Trade, Industry and Competition has introduced a Pre-Export Verification of Conformity (PVoC) programme requiring selected imported goods to comply with South African National Standards before shipment.
Products covered during the initial implementation phase are expected to include clothing, cosmetics, skincare products, toys, electronics and household goods imported primarily from China.
The South African Bureau of Standards (SABS) will oversee product verification, while customs and border authorities will enforce compliance when goods arrive in the country.
Laboratory testing will also focus on cosmetics and skincare products to identify potentially harmful substances such as hydroquinone and mercury.
Taken together, the payment reforms, revised import tax rules and new product certification requirements represent one of South Africa’s most significant regulatory updates for cross-border online shopping in recent years.
Industry observers say the combined measures could increase compliance costs for overseas sellers and may eventually influence product pricing for South African consumers, although the final impact will depend on implementation and market competition.
Source: South African Reserve Bank (SARB); Department of Trade, Industry and Competition (DTIC); South African Bureau of Standards (SABS)